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Optibase Ltd. Announces Second quarter Results
[August 31, 2021]

Optibase Ltd. Announces Second quarter Results


HERZLIYA, Israel, Aug. 31, 2021 /PRNewswire/ -- Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the second quarter ended June 30, 2021.

Revenues from fixed income real estate totaled $3.5 million for the quarter ended June 30, 2021 compared to revenues of $3.8 million for the second quarter of 2020.

Net loss attributable to Optibase Ltd shareholders for the quarter ended June 30, 2021 was $537,000 or $0.10 per basic and diluted share compared to net income of $1.8 million or $0.34 per basic and diluted share for the second quarter of 2020.

For the six months ended June 30, 2021 revenues totaled $6.9 million compared to revenues of $7.9 million for the six months ended June 30, 2020. Net loss attributable to Optibase Ltd Shareholders for the period was $1.4 million or $0.26 per basic and diluted share, compared to net income of $1.9 million or $0.37 per basic and diluted share for the six months ended June 30, 2020.

Weighted average shares outstanding used in the calculation for the periods were approximately 5.2 million basic and diluted shares for each period.

As of June 30, 2021, we had cash and cash equivalents of $29.1 million, and shareholders' equity of $83.9 million, compared with $28.8 million, and $86.7 million, respectively, as of December 31, 2020.

Amir Philips, Chief Executive Officer of Optibase commented on the second quarter results: "This quarter our fixed income real estate rent has decreased compared to the second quarter of 2020 and we had a net loss of $537,000 compared to net income of $1.8 million for the second quarter of 2020, the decrease is mainly due to the sale of our portfolio in Germany during the second and the third quarters of 2020. For the second quarter of 2021, we generated NOI of $3 million compared to NOI of $3.1 million for the second quarter of 2020. In addition, for the second quarter of 2021, our Recurring FFO of $869,000 stayed stable compared to Recurring FFO of $862,000 for the second quarter of 2020." Mr. Philips concluded: "We will continue to work to maintain our operating results and to increase our financial stability."

ACCOUNTING AND OTHER DISCLOSURES

Non-GAAP Net Operating Income, or NOI, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is operating income, which, to calculate NOI, is adjusted to add back real estate depreciation, and amortization, general and administrative expenses and other operation expenses less gain on sale of operating properties. We use NOI internally as a performance measure and believe that NOI (when combined with the primary GAAP presentations) provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense item that are incurred at the property level.

We consider the NOI to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, to understand the core property operations prior to depreciation and amortization expenses and general and administrative costs. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, we consider the NOI to be a useful measure for determining the value of a real estate asset or groups of assets.

The metric NOI should only be considered as supplemental to the metric operating income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI should also not be used as a supplement to, or substitute for, cash flow from operating activities (computed in accordance with generally accepted accounting principles in the United States).

Non-GAAP Funds from operation, or FFO, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income, which, to calculate FFO, is adjusted to add back depreciation and amortization and after adjustments for unconsolidated associates. We make certain adjustments to FFO, which it refers to as Non-GAAP recurring FFO or recurring FFO, to account for items we do not believe are representative of ongoing operating results, including transaction costs associated with acquisitions. We use FFO internally as a performance measure and we believe FFO (when combined with the primary GAAP presentations) is a useful, supplemental measure of our operating performance as it's a recognized metric used extensively by the real estate industry. We also believe that Recurring FFO is a useful, supplemental measure of our core operating performance. The company believes that financial analysts, investors and shareholders are better served by the presentation of operating results generated from its FFO and Recurring FFO measures.

We consider the FFO and Recurring FFO to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, in analyzing our operating performance.

The metric's FFO and Recurring FFO should only be considered as supplemental to the metric net income as a measure of our performance. FFO (i) does not represent cash flow from operations as defined by GAAP, (ii) is not indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is not an alternative to cash flow as a measure of liquidity, and (iv) should not be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating our operating performance.

Media Contacts:
Amir Philips, CEO, Optibase Ltd.
011-972-73-7073-700
[email protected]  

Investor Relations Contact:
Marybeth Csaby, for Optibase
+1- 917-664-3055
[email protected] 

 





Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data

A reconciliation of operating income to NOI is as follows:


Six months ended

Three months ended


June 30

June 30

June 30

June 30


2021

2020

2021

2020


$

$

$

$


Unaudited

Unaudited

Unaudited

Unaudited






GAAP Operating income

2,278

5,498

1,163

3,789






Adjustments:





Real estate depreciation and amortization

1,981

1,759

1,001

888






General and administrative

1,583

1,512

847

712






Gain on sale of operating properties

-

(2,317)

-

(2,317)






Non-GAAP Net Operating Income NOI

5,842

6,452

3,011

3,072







 

 

A reconciliation of net income to FFO and Recurring FFO is as follows:


Six months ended

Three months ended


June 30

June 30

June 30

June 30


2021

2020

2021

2020


$

$

$

$


Unaudited

Unaudited

Unaudited

Unaudited






GAAP Net (loss) income attributable to Optibase LTD

(1,359)

1,894

(537)

1,777






Adjustments :





Real estate depreciation and amortization

1,981

1,759

1,001

888






Pro-rata share of real estate depreciation and 
amortization from unconsolidated associates   

1,463

1,644

737

817






Non-controlling interests share in the above
adjustments

(652)

(598)

(332)

(303)






Non-GAAP Fund From Operation (FFO)

1,433

4,699

869

3,179






Gain on sale of operating properties

-

(2,317)

-

(2,317)






Non-GAAP Recurring Fund From Operation
(Recurring FFO)    

  

1,433

2,382

869

862











Amounts in thousands





 

About Optibase 

Optibase invests in the fixed-income real estate field and currently holds properties and beneficial interest in real-estate assets and projects in Switzerland, Texas, Philadelphia, PA, Miami, FL, and in Chicago, IL, USA and is currently looking for additional real estate investment opportunities. Optibase was previously engaged in the field of digital video technologies until the sale of its video solutions business to Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia in July 2010. For further information, please visit www.optibase-holdings.com.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, difficulties in finding suitable real-estate properties for investment, availability of financing for the acquisition of real-estate, difficulties in leasing of real-estate properties, insolvency of tenants, difficulties in the disposition of real-estate projects, risk relating to collaborative arrangements with our partners relating to our real-estate properties, risks relating to the full consummation of the transaction for the sale of our video solutions business, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this press release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.

 

Optibase Ltd.

Condensed Consolidated Statement of Operations

For the Period Ended June 30, 2021


Six months ended

Three months ended


June 30

June 30

June 30

June 30


2021

2020

2021

2020


$

$

$

$


Unaudited

Unaudited

Unaudited

Unaudited






Fixed income real estate rent

6,936

7,895

3,491

3,788

Cost and expenses:





Cost of real estate operation

1,094

1,443

480

716

Real estate depreciation and amortization

1,981

1,759

1,001

888

General and administrative

1,583

1,512

847

712

       Total cost and expenses

4,658

4,714

2,328

2,316






Gain on sale of operating properties

-

2,317

-

2,317






Operating income

2,278

5,498

1,163

3,789






Other Income

332

148

171

148

Financial expenses, net

(854)

(1,164)

(255)

(563)

Income before taxes on income

1,756

4,482

1,079

3,374

Taxes on income

(740)

(105)

(420)

(447)

Equity share in losses of associates, net

(945)

(942)

(478)

(535)











Net income

71

3,435

181

2,392






Net income attributable to non-controlling interests

1,430

1,541

718

615

Net income (loss) attributable to Optibase LTD

(1,359)

1,894

(537)

1,777






Net income (loss) per share :





Basic and Diluted

($0.26)

$0.37

($0.10)

$0.34











Number of shares used in computing earnings losses
per share





Basic

5,186

5,186

5,186

5,186

Diluted

5,186

5,186

5,186

5,186











Amounts in thousands.





 

 

Condensed Consolidated Balance Sheets


June 30,

2021

December 31,

2020


Unaudited

Audited

Assets






Current Assets:



Cash and cash equivalents

29,096

28,820

Restricted cash

681

835

Trade receivables, net

163

216

Other accounts receivables and prepaid expenses

2,338

569

Bonds related deposits

2,292

2,564

Total current assets

34,570

33,004




Long term investments:



Long-term deposits

97

98

Right-of-use assets

203

272

Investments in companies and associates

6,111

9,269

Total Long term investments

6,411

9,639




Real estate properties, net

182,568

192,054




Total assets

223,549

234,697




Liabilities and shareholders' equity






Current Liabilities:



Current maturities of long term loans and bonds

4,763

6,447

Accounts payable and accrued expenses and other

4,377

4,144

Operating lease liabilities

146

166

Liabilities attributed to discontinued operations

2,061

2,061

Total current liabilities

11,347

12,818




Long term liabilities:



Deferred tax liabilities

14,549

15,095

Land lease liability, net

6,723

7,054

Operating lease liabilities

83

146

Long term loans, net of current maturities

106,900

112,923

Total long term liabilities

128,255

135,218




Shareholders' equity:



Shareholders' equity of Optibase Ltd

58,461

61,464

Non-controlling interests

25,486

25,197

Total shareholders' equity

83,947

86,661




Total liabilities and shareholders' equity

223,549

234,697




Amounts in thousands



 

Cision View original content:https://www.prnewswire.com/news-releases/optibase-ltd-announces-second-quarter-results-301365948.html

SOURCE Optibase Ltd.


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